Professional Fiduciaries in Probate and Trust Administration, with Kevin Bemel

0:01 One of the really important team members in a probate administration, trust administration, or litigation is professional fiduciary in California professionally licensed fiduciary. This is a person who kind of sits in the middle between perhaps two warring sides or one side that doesn't have the ability on their own to lead the administration and need a professional to help them. Now, it sounds easy, but when you're standing between two different parties who already are lawyered up, how do you avoid getting drawn in yourself? And more probably, how do you maintain being productive on perhaps a really high net worth, high risk, high value situations? Well, one of the people I know who does that daily is Kevin Bemel, who I've known for a long time. He's a professional fiduciary with deep experience in commercial real estate as an appraiser, as a property manager. Kevin, thank you for joining us on Probate Weekly.

0:51 Well, you're welcome. Thanks. Thanks for having me on, Bill. It's always good to come and talk with you about these things cuz you know so much about them. Now on one hand, I really encourage you. I like to think I'm one of the key people who encouraged you to get into this business, to kind of pivot, to leverage your experience, knowledge, training cuz I saw the need for it. At the same time, when I described the job, I felt guilty how tough [laughter] it is. I invited you to be the front-line shock troops of a Marine battalion landing on the enemy shore. [laughter] So, first off, please forgive me, but second, at the same time, I know you love it, and I love it, too. Talk about kind of the mixed emotions between the challenge that goes on, but also the determination to see the job through.

1:32 Well, so yeah, so the fact of the matter is and I would hope you would take this as the compliment that it's meant, but you were the one who suggested this to me, for which I will always be grateful. I think it's it's important that a- a- a- If anybody who's considering, you know, being in this role nobody grows I don't know of anybody who has grown up thinking gosh when I grow up I want to be a professional fiduciary. Astronaut maybe you know police officer fireman.

2:11 Fireman my grandson is going to be a fireman. Yeah or you know football player but you know so at some point in our lives somebody you know tells us about this and for me it's been incredibly gratifying and part of that comes from the fact that that that you know you who has been such a long-standing friend and colleague of mine you know open my eyes to this so you so you have my gratitude nothing to apologize for.

2:44 Okay I got the blame too. [laughter] You can take the blame for other things perhaps but not for this but I would say that I mean yes at times the work is is frustrating it's stressful but you know when I'm not you know just so exhausted right I realize that everybody has stresses and frustrations in their work. It is the nature of you know human endeavor and the reality is I think I'm pretty fortunate because I have a lot of leeway in creating the teams with whom I will be doing this work. And so you know I get to choose in large to a large extent who goes on these various journeys with me. And look sometimes I make you know really good choices other times maybe less so but that's all part of part of it as well. And also I get a lot of opportunity. If there wasn't the difficulties, I wouldn't have an opportunity to grow professionally, which for me is important.

4:07 Right. and I also wouldn't have an opportunity to help my other team members grow professionally, which I think I tend to work with people who like you know, share that desire. So, I think it's it's an it's it's important not to lose sight of that aspect of what we do.

4:28 You know, on one hand, I think as business people, we all want the easy, better business. You know, in my case it's real estate agent the larger properties with the easy transactions. On the other hand, those don't either A make us better as humans or as business people or B, you know, the money we get paid really is a reflection of the problems we solve. And so, if we avoid those problems looking with easy cases, we're also avoiding opportunities to get paid to solve people problems. So, that's kind of the that the razor's edge I think we live on is we want enough problems to solve to be productive and helpful, and we enjoy that. at the same time, you know, sometimes we want to dodge to the right and go where it's a little easier. I think the thing that that you've helped me discover is that one of the solutions to that dichotomy is it's one thing to have tough cases, but as long as you have great team members around you, then those tough cases are at some level doable or survivable. It's when you deal with bad team members and bad cases that you're really up against. So, talk a little bit about and you mentioned how you get to choose that. Talk about how important it is I think for the attorneys to pick good fiduciaries who are going to be strong and stand up for them or recommend or introduce in some cases. Talk about the importance of picking your team.

5:45 Yeah, so at least in my practice and I don't know that this is the same for all fiduciaries, but in my practice, I typically am the team captain in the sense that whatever is happening I'm really the one that's that's driving all of that. whether the matter originated with me and I'm picking for example, you know, the attorney who's going to represent me or you know, the attorney brought it to me with the understanding that, you know, in essence, he'll represent me or he'll I'll have to find someone because he's representing another party. in some way or another, I kind of end up as the team captain. And so as the, you know, quarterback, I guess is probably the best you know, sports metaphor. I need to think carefully about what am I what am I going to be faced with in this situation? And what are the qualities of the individuals I need to have surrounding me in order to make this go as smoothly as possible. Recognizing, and I think this is the key, and this may be a little bit of a little bit of different between what you and I do.

7:03 If there isn't some kind of problem, if it's a really smooth, easy administration, nobody really needs me. You can have, you know, a family member do it. It's easy and there's no there's no conflict to navigate and there's no, you know, difficult assets to handle. Well, so then you probably don't need me. I'm not going to add value and that's you know, if I were presented with that situation, I probably wouldn't take it because I would feel like I'm sort of cheating the estate by taking money for something that, you know, doesn't require my level of expertise. So, you know, where it's difficult, I think, for me is when I'm getting involved in a matter, really understanding up front what are the complications that I may be facing down the road. And this is where I think or I should say this is why I think that it's harder to find a professional fiduciary for a smaller matter. Because the size of the estate rarely has anything to do with the complexity, per se. Because most of the complexity in an estate comes from the people far more far more so than, for example, the assets. Or, you know, if an estate has a $500,000 stock portfolio, okay? Still need someone who knows how to handle stocks and bonds, okay? Someone who can handle a small one that may be, you know, this person.

8:43 If an estate has got a $10 million stock portfolio, okay, that still has to be handled. And maybe you need someone who's a little more sophisticated to do that. But those problems are essential or those not they're not even problems those issues are pretty much the same. what's different is you could have a $500,000 estate with 10 heirs who are, you know, who are engaging in the administration like it's a blood sport. And that will be far more complicated than a $10 million estate where you have maybe one heir. And so there's there's there's nobody to fight, right? So, I think these are the kinds of issues of that that I've, you know, over the years that I've been doing this that I've had to learn and figure out ways to navigate successfully. And the people I have on my team are the ones that are going to help me do that. And I have to try and figure out, you know, who's going to be the best person to handle this particular dynamic in any given situation.

9:53 Well, I've worked with numerous fiduciaries, and I have some great relationships with some of them who really do a good job in particular areas. I think there's a there's a wide variety of what these estates look like. The one in particular I think you bring tremendous expertise and experience in is with real estate, particularly commercial real estate. And I know I'm working on with you a particular estate where the only cash-producing asset is was facing foreclosure or threatened with foreclosure. the largest asset was also facing foreclosure. And then the other party didn't want to sell anything. It's like, "Well, what do we do?" Oh, and by the way, somebody's been collecting the rents and not putting the money in the estate. So, what do we do? And the answer is that it really takes somebody to really look at the properties and make a plan and get involved in the lenders and the tenants and such. So, talk a bit about kind of where does the fiduciary end and the commercial real estate begin? Or is it the blend of the two that makes it effective? I know that you don't collect fees on both aspects. so, you're only you're only acting as a fiduciary as executive of estate or trust. So, how does how do you manage that task artfully and effectively, I guess?

11:08 Well, I mean you know, in the particular matter to which you're referring, I you know, I think the jury is still out on whether I'm handling it artfully. But you know, setting that aside, I look I am you know, my job is to make the decisions that are best for the estate or the trust, whichever, you know, whichever entity it is. And I have to separate that as much as I can from the interest of any individual heir or beneficiary.

11:49 Right. And I And I it that sounds really simple and it's simple to explain, but that's this is where the art, I think, of administration comes in. Right? So, what I at least try to do is to convey to the various parties involved, "Look, I'm here to be neutral. I'm not on this person's side or that person's side. I'm here to do what's best for this entity called the estate or the trust that really is a separate, almost legal person from the you know, flesh-and-blood people who hope to benefit from it. And that is for the good of everybody. Now, you know, when it comes to like if for example, if an estate owns a lot of real estate, so the fact that I have a deep background in real estate, I think it gives me the opportunity to have greater insight into how things might work. It hopefully gives me more creativity in finding solutions to problems for the benefit of the estate or the trust.

13:14 But in but in the in the end, you know, I'm not going to be the person, you know, marketing a property for sale because that's it's that's not my job. I'm not going to be the person doing the day-to-day management of a property. That's not my job. I'm going to bring in team members to do that. but I will I will say that while my professional experience is

13:40 [snorts] you know, heavily involved in real estate my experience in problem-solving goes all the way back to college. I have a degree in architecture and you know, for those who are not familiar with what a degree in architecture really involves, it really involves problem-solving. You're given a list of wants and needs of a particular project and the architect's job is to put together a building that will in essence solve those problems. So, from my from my college days and I could argue maybe even before that a lot of my work was focused on, "Okay, here's what I've got. Here's what I'm trying to build. How do I do that?" So, real estate happens to be a particularly, I think, productive laboratory for dealing with those kinds of issues. but I've also run a number of businesses of my own over the years. That is it's a similar thing, right? What is business? Business is a process of solving problems for someone else, whether it's by providing a product or a service. That's what we're doing if we're being successful, right? We're I what I think it was Zig Ziglar said, you know, the person who makes the most money is the person who solves the most problems for other people, right?

15:00 So, that's the fundamental [clears throat] basis, I think, of being a fiduciary is we're looking to solve other people's problems and the background we bring to it gives us I think the experience to do that. Now I would I would I'm just going to add real quickly, that's for those of us who are, you know I work in the on the financial side of being a fiduciary. There's a whole another kind of categories of fiduciaries who are doing things like conservatorships of the person, guardianships, where there's a whole sort of client care you know aspect to it. I don't do that kind of work. I don't have a health care background. I'm not qualified to do that and that's and so I think it's important for

15:50 [clears throat] anybody contemplating bringing a fiduciary in to understand what is their background. If a fiduciary is saying, "Oh, I do it all." I would be I think a little bit skeptical about that cuz I found generally fiduciaries are effective in one or the other but not both.

16:14 Well, it's like my license. I can go anywhere from, you know, renting a house to selling the Golden Gate Bridge, but I wouldn't sell the Golden Gate Bridge or it wouldn't harm me to sell the Golden Gate Bridge if I owned it. Not that I own a bridge or anything, but you know, [clears throat] you mentioned about your position with the estate. Big misconception, I think I've experienced is that many heirs, even the largest heir or the most dominant heir, often imagine that really working for them individually, whereas it's the opposite when there's multiple heirs. By definition, you're working for the good of the entire estate. Now, it might be that one heir benefits the most, but it has to be in fair. In fact, it is so funny. Just this morning on a case you and I have been working on, where it just seems like, you know, the heirs just want to fight. Like they it's like a cockfight. They just want to kill each other. And you've been you've been saying to me all along that you wanted to get out of it if they didn't resolve it the way you wanted to and we're going to take instructions that you were going to attempt to resign. You don't get to just resign. You have to get the judge degree. They're trying to remove you. They paid for somebody who I have you search. I couldn't tell who this person is. And I'm thinking, "Oh my god." And then of course the judge denied the motion. So Here you want out. They filed to ask to force you out and you still can't get out of the deal.

17:35 Right. That's the nature of fiduciary thing. Well right. I mean, you know, there's always a process, right? And in this in the estate to which you're referring, so one of the heirs took an advance on an inheritance and the advancing party you know, as far as I know, they don't really know what's going on. All they can see is, you know, documents in the court records. So they have no idea about

18:07 [clears throat] you know, the bloodbath that's going on that that that has prevented me from effectively administering the estate, right? And so, you know, their natural assumption is, "Oh, this must be Kevin's fault." And it's like

18:23 [laughter] you know, I'm perfectly happy to accept the responsibility, but I will also say that there are situations that are beyond my ability to mediate, to negotiate. and that and that that is and I told everyone involved. I said, "Look, if we can't come to a resolution on this issue, I am going to resign. I You've you know, I have no other choice." I you know, I can't be effective in doing what I'm supposed to be doing when I'm opposed at every turn. it was just coincidental that this petition to have me removed was it was it was submitted on an ex parte basis, which is not a legitimate way to do that. It was It was almost foregone that the judge was going to reject it. It's It is interesting. You would have thought they would have contacted me directly and said, "We don't like what you're doing. We want We want to replace you because And I would have And I would have said to them, "Well, coincidentally, my lawyer is, you know, is is preparing a petition of resignation. If you want to endorse it,

19:35 [laughter] you know, we can probably get this deal done." What's funny cuz you were in some ways putting out that the attorney was late on getting that done. You instructed him to do it. Hadn't been filed yet for you trying to get out of it and then turns out And I'll I'll just for those watching,

19:48 [clears throat and cough] I've I actually had a class on probate advances for real estate agents and investors and I've literally interviewed everyone every company I could possibly speak with, had them on video, I've written up numerous posts, I had a class on how to do it. The This company was the one company who I could never get them on the phone. It was really amazing. Because the other companies I would call one of their, you know, executives and say, "Listen, why do you want to remove him? That's probably not the solution. Your customer is the problem." In this case, I couldn't even do that because they, you know, as much as I tried, I just had no relationship with them. So, it's just funny how I think that to go back to the issue we talked about before, your team is so important and I was a found that people are very confrontational and abusive kind of surround themselves with people who either are the same or put up with that and that's why the team is so important and I'm not surprised that that was who the advance company was. So, on a on a more positive note, you also deal in, I've seen I've been in the room with very sophisticated estate planning, very sophisticated tax strategies, very that there is almost like a ballet between selling the property, getting the money in the right account at the right time, in the right trust, creating multiple trusts, creating multiple bank accounts. Sounds so simple when you lay out the plan, but to get the banks to do the paperwork, the accountants do the paperwork, the attorneys do the paperwork, while you're not maybe the quarterback of that activity cuz it's a little beyond your scope as far as the estate planning and taxes, it's got to get done and you got to make sure it gets done. Talk a bit about how you coordinate with very sophisticated financial professionals as well.

21:28 Yeah, so you know, in reality, often times I am the one Well, I'm not the lawyer here who's drawing up the trusts or the accountant who is planning out the tax strategy. Again, where I add value is when a client needs that level of sophisticated planning, typically they don't have the experience and the knowledge to understand it. and so I don't mean to imply that that, you know, they'll be taken advantage of by, you know, a lawyer or an accountant or whatever, but often times they need someone to help them understand who maybe can translate some of the legalese or the accountese or whatever you want to call it so they can they can get comfortable with all of this complexity that's being thrown at them that is indeed for their benefit, but they don't they just don't have the experience or kind of the ability to absorb really what is this all about. And so that's I think that's one part of it is I'm I'm there to facilitate their understanding. On the other side, I'm there to make sure Look, even the best professional and I'm fortunate to work with really great lawyers, really great accountants.

22:59 These are people who absolutely care about meeting their clients best interests, of doing an absolutely superb job. but look, we all kind of benefit from having another set of eyes on what we're doing, asking intelligent questions, and making sure that, you know, we have thought it through. And so, in working with the other members of the team, you know, that's that's the other aspect to all of this is because I have long experience, deeper knowledge, so I can almost always ask questions that are relevant, that that can lead to a better a better plan, a better solution than if those questions weren't asked. So, you know, just to give you an example, I had a phone call yesterday with a fellow I met at the STEP LA conference. STEP is an organization of international estate and tax planning professionals. We had we had a really amazing conference a couple of weeks Well, it's been it's been a little while ago now. in Palos Verdes, and I met a fellow there who does very sophisticated international investing in securities as a way to diversify the holdings of a trust or an estate or whatever of you know, somebody's wealth.

24:31 And you know, up until now, I haven't done a whole lot of that level of international investing. What I've you know, what I've done for my clients in connection with the various wealth advisors I work with is things like maybe there's there'll be an like an international ETF or an international mutual fund or something like that, right? This is this is at another level that that deals with being able to hedge currency fluctuations and that sort of thing. You know, and I said to him, I look, I'm I'm really glad to have met you, spent time you know, having dinner with you at the conference. This I'm new to this. So, while I have a pretty deep financial background, I need you to help me dig into and understand what your how your program can benefit my clients. so that I can know whether it's the right solution and if so, for which client, right? And my clients they're wonderful people, most of them anyway.

25:39 [laughter] But you know, they don't have the background to do that and they also don't have the you know, the ability to make connections with these kind of resources. And so that's another function that I provide is is I'm out there, you know, looking for these kind of opportunities to bring to the table for them.

26:02 You also I again have been in the room with you a few times. I think you also bring if you should bring and I think you do bring kind of a 3,000 ft view where the professionals maybe at 10,000 ft see the legal implications, the financial implications, the wealth estate planning implications, but somebody has to be above that and say, "Okay, well, that might work to avoid paying taxes, but they need a certain amount of income or they have this financial need coming up with their children or whatever it might be." And so you kind of have to coordinate at some level, you know, and moderate between competing interests. I think we all, you know, obviously as a real estate agent, I would I love to sell all the real estate. Of course, why not? I get paid. But sometimes it makes sense for clients to hold on to, you know, certain properties for various tax or cash flow reasons. And you know, so my job is to find out what the client needs and try to fit in that pattern and there's always that tension between what's in it for me and what's in it for the client and I think your job is to come balance those interests amongst your four different sometimes competing interests from different professionals. I think you do a good job of that. How do you know stay there with the referees well? So you bring us you bring us some very powerful people. I mean the people you're that I've seen you with in their own worlds are used to being the quarterback and here you're quarterbacking a kind of team of quarterbacks it looks like.

27:16 I mean yeah sometimes. So I think you know the core ethos of the fiduciary, right? Is is I'm putting my client's best interests ahead of my own. And the way I've always looked at that is in many ways it's it's as if I'm the client in the sense that if this money were mine, what would I want done with it?

27:44 Mhm. The only way that I can figure that out is to really as deeply as possible understand who my clients are, what they want, what their what their conditions of satisfaction are for their lives, what their goals are, what their family dynamics are. So you know this is I don't know if I mentioned this you know as a guest on your show previously but you know prior to this I was a chaplain in the United States Navy and this is where that background I think is particu- particularly useful because I spent years working with people to figure out how to help them solve problems in their lives, right? And so in some ways being a professional fiduciary is just an extension of that ministry. and so it's incumbent upon me to understand my clients at or to know my clients I think at least as well as they know themselves if not maybe a little bit better in the way that, you know, an outsider can. and that, you know,

28:54 [clears throat] to use kind of a you know, term of art, that's kind of my, you know, superpower, if you will. And that's, I think, what gives me the opportunity to work with a team of very high-powered people because they know that I've done that that work. And so then I can convey to them information that they don't have that allows them to do their work better than if I was not involved. Or can they can do their work more efficiently because they don't need to do all that investigative work you know, duplicative to mine. And so we're all able to do a better job. I'm able to do a better job because they have a knowledge base and an experience base to help my clients out that I don't have. They're able to do a better job because I have a rapport with the client and knowledge of the client that they're they don't have. And so when we combine those, we're we're, you know, we're raising the tide for the whole group.

30:04 Yeah, I know as a real estate agent working with you on behalf of clients is so helpful in that you know, my job is to not be emotional in any way, but to present information to my clients, explain things to them, to listen to them, understand what their concerns are.

30:20 [clears throat] but it's hard because sometimes, you know, I deal with consumers who are emotional by their nature. It's a house, it's a big amount of money. And in talking to you instead of the client directly, we can talk about the problems and talk about the solutions, and really ask, you know, how they were going to feel about this. We you ask a client that, they're going to tell you how they feel about it for like an hour. Whereas

30:40 [laughter] you know, and you've it's really helpful in terms and very efficient in dealing with customers that problems that might really be hard to resolve and get through the client's emotional side of it to get to a solution. I think as a fiduciary you provide that. It's meant that way for people who don't have the capacity make decisions, but it's also effective for people who you know, need some calming, you know, overview and perspective on these decisions. So that's been great for me.

31:09 I'm just if I can just chime in on that for a minute. I think this is one of this is one of the great parts about our working together is I think we both kind of back each other up on those. So, you know, we did a we're we're involved in a transaction right now that you know, hopefully is going to close soon and there was you know, a couple of points toward the you know, when we were trying to sort of finalize the terms of the transaction and you know, I ended up I think pressing you a little more on one particular aspect of it than you know, maybe you would have otherwise done. and it wasn't so much the money involved per se, it was you know, because a prior transaction had fallen apart and we weren't able to get a new you know, a new deal for the property at the same price and so I wanted to be aware of what is the emotional impact that's going to have you know, on the heirs and so by pressing on this point and in the end winning the point, it kind of gives us something to say to them, well, yeah, we weren't able to get as much as we had before. That's one of the reasons why that transaction fell apart, but on this transaction, you know, we were able to do this which is for your benefit even though, you know, frankly it'll benefit each of the heirs like, you know, $100 or $200 or whatever it was, right? But, collectively there's a benefit there. So, I think that you know, as people working together in a team, we need to keep kind of the we need to avoid the emotion between us, but we need to keep in mind the emotional impact on what we do with respect to beneficiaries, heirs, etc.

33:04 Well, look, I was we have a pretty deep long relationship. We could talk about and tell stories for hours. I'm a little past the time [laughter] you all get. So, I have all these things I wanted to talk about. We'll have We've had you on before. We'll have you on again. I really appreciate, as always, getting a chance to chat with you. If anybody was maybe looking for help with a professional fiduciary, if you need an attorney or financial, you know, professional of some sort, Kevin Bemel is long-time successful professional here in Southern California in real estate. And I think one of the key things as a fiduciary is he has deep understanding and resources in real estate management and particularly commercial real estate management. Kevin Bemel, phone number [phone number shown on screen]. [email address shown on screen]. If you're driving can't write that down, feel free to reach out to me. I'd be honored to make that introduction. And then the Bemel Companies, he has a number of different aspects to his business. You're welcome to go on there and get all those details. Kevin, thank you so much for sharing with us not just how you do business, but really the concept of the fiduciary and the place of that and how to be effective with that.

34:05 You're welcome, Bill. It's always a pleasure. Always a pleasure. Yeah, Probate This is probably weekly. We get together every week and usually talk to probate attorneys, litigators. In this case, a fiduciary, key part for larger or more complicated estates. Hope you found it helpful. Give me your feedback. I'd love to hear your notes, comments. If you want to be interviewed on my podcast, I'd love to hear from you as well. If I can help in any way, please reach out at Bill Gross Probate on social media. As always, make today your best day ever. Thanks so much.